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Endurance Specialty Holdings Ltd. Message Board

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  • pjv2xyw9dww4b5 pjv2xyw9dww4b5 Jul 8, 2008 12:22 PM Flag

    wow, whats not


    bought more at 29.60
    averaging down

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    • This economic slow down may effect margins a bit. Inflation may also hurt. But with construction slowing and property deflating the revenue drop may be equaled by a drop in payouts. So while margins may squeeze a bit I don't think it will be too bad.

      50 million would be the write down for the 2-3% of subprime and alt-A mortgages held in their mortgage backed securites portfolio. Thats only about a 10% hit to the TTM earnings available to shareholders. That is bascially writing off all those securities to zero. Now if normal mortgage back securities must be written down this could be a huge number. Still one must assume that long term these securities will bounce back as long as the houses don't enter into foreclosure.

      My opinion is that they should only write down securities gradually. The markets write now are moving up and down to fast to make this a basis for valueing these types of security. I was trying to understand why insurance companies seem to be going up and down with the banks. It has to be all about the assumed valuations of the types of securities the insurance companies hold. With all forms of securities dropping it must be tough to be an insurance company. On the otherhand they are also investing funds into securites as really low prices so it can work for us too.

      Long term the AAA securities they hold should hold up well so I think we really need to just hope for good weather.

      The markets are in real panic mode now. I think their are great buys everywhere. The only real question is are we really going to have a great depression or not. If we are stay away from the markets. If we are not then this is a very very good time to purchase stocks.

      ENH's forward PE of approximately 5 assuming $5 per share earnings is extremely low. From a cash flow basis, if we also assume which seems safe to say that free cash flow per share will also be a conservative $5 per share then the cash flow alone over 5 years will produce a $25 per share value.

      The point I'm trying to illistrate is that unless revenues completely dry up or we have another Katrina like disaster this companies balance sheet should be OK within 5 years regardless of what their assets in forms of securities do.

      I like our chances here. Thinking of buying more but I'll probably wait until I see insiders purchase shares. Surprised we haven't seen this already. Of course sub 30 prices have only been here for a short time.

66.80-0.01(-0.01%)2:56 PMEDT